Mexican Government Assumes Control Of BanCrecer
On November 3, 1999, Mexico’s Bank Deposit Insurance Agency (IPAB) assumed control of BanCrecer SA after shareholders agreed to cede control of the ailing institution. With total assets of $11.2 billion as of June 30, 1997, BanCrecer has been plagued by poor asset quality, which has further deteriorated in recent years. Last year, the bank failed to complete a $500 million capitalisation plan, and current estimated losses stand at around $900 million. The costs for the cleanup and eventual sale of the institution are expected to reach nearly $10 billion, and all current shareholders will lose 100% of their equity–valued at around $900 million. The IPAB stated that it hopes to complete the salvage process and initiate the sale of BanCrecer in December 2000. So far, Mexico’s Grupo Financiero Banorte SA and Grupo Financiero BBV-Probursa SA– the Mexican subsidiary of Spain’s Banco Bilbao Vizcaya SA– have expressed interest in purchasing the assets of the failed institution.